OREANDA-NEWS. The Asian Development Bank (ADB) and Orient Commercial Joint Stock Bank (OCB) have signed an agreement under which ADB’s Trade Finance Program (TFP) will provide guarantees of up to $20 million a year to support trade in Viet Nam. OCB’s participation means the TFP now has 12 bank partnerships in Viet Nam.

“Under this agreement, ADB and OCB will support exporting and importing companies, including small- and medium-sized enterprises,” said Steven Beck, head of trade finance at ADB. “This agreement will help create economic growth and jobs.”

In the past few years, Viet Nam has consistently been one of the top five most active among the 20 developing markets where the TFP operates. To date, the program has conducted 4,479 transactions, supporting over $6.9 billion in trade in Viet Nam. Ofthese, roughly 75% were for trade financing for small- and medium-sized enterprises.

“Viet Nam is one of the Trade Finance Program’s most active and important markets and signing this agreement adds to the program’s significant record of support for trade in the country,” said Santosh Pokharel, TFP’s relationship manager for Viet Nam. “We are pleased to be working with Orient Commercial JS Bank.”

Viet Nam’s economic growth has been increasing since 2012— gross domestic product (GDP) expanded 6.7% in 2015, its strongest in seven years—propelled by a surge in foreign direct investment and export-oriented manufacturing. However, at least 70% of Viet Nam’s GDP is generated in the cities and serious development challenges remain, particularly, to make growth more inclusive. For instance, SMEs’ access to trade finance remains limited with Viet Nam’s banking sector not yet as developed as in other markets in the region like Malaysia, the Philippines, or Thailand. As such, international banks either have limited or no appetite to take risks on Vietnamese banks.

As well as providing loans and guarantees in Viet Nam, the TFP will conduct workshops and seminars to increase knowledge and expertise on trade finance which should result in more support to exporting and importing companies in Viet Nam.

Backed by ADB's AAA credit rating, the TFP provides guarantees and loans to over 200 partner banks to support trade, enabling more companies throughout Asia to engage in import and export activities. With dedicated trade finance specialists and a response time of 24 hours, the program has established itself as a key partner in the international trade community, providing fast, reliable, and responsive support to fill gaps in the region’s most challenging markets.